A fear of automation in Asia

In India and China today the change culprit is automation. Fears of job losses abound.

The counter argument, of course, is that lower-skill jobs are replaced with higher-skill,higher-wage jobs which leads to a better standard of living for everyone.

The truth is while the fear of job loss is real, the real issue holding back automation in Asia hinges on two factors: Capital investment for the equipment and; financial benefit of replacing manual labor with machines.

The minimum wage in the US is high when compared to China and India. Therefore, the capital investment in automation equipment can be recouped within a short amount of time.

However, China and India both have very inexpensive labor forces so it requires more incentive for these Asia-based companies to jump on the automation band wagon.

China is just starting to embrace automation as they recognize the benefits of leveraging the strengths of both humans and automated machines.

Humans are best suited for tasks that require subjective judgments and cognitive reasoning…i.e. monitoring an HMI and adjusting the machine based on visual feedback. Automated machines excel where the task is high speed, highly repetitive, highly precise, or located in hazardous environments…i.e. pick and placement of components on PCBs or dangerous mining operations.

While automated machines are expensive, they can sustain maximum output levels only requiring periodic maintenance. Although China has a cheap workforce compared to the US, pushing workers beyond their comfort levels can have serious repercussions. Foxconn was the latest example of how the workers revolted because of working conditions. The result a PR nightmare and financial set setback.

India has not embraced automation to the same degree as China because the financial incentive is not large enough as of yet. I believe over time India will adopt automation but it will take some major financial incentives before there is any mass deployment of automation.

I encourage you to read an execllent article by Jeremy Pollard from controldesign.com about the slow adoption of automation in India. He discusses the many challenges face an emerging country as it moves toward automated technologies.

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1 Comment

Jeremy Pollard

03/26/2013 8:57 pm

Hi Andy. Nice work…. I must suggest that the requirement for automation ‘in the beginning’ had nothing to do with money as such. Time to market, safety, and final product reliability and consistency were the benchmarks.funny how Greed creeps in… if they (who ever they are) focus on strictly labor replacement, it will never happen.I once had a conversation with my friend Dick Morley. Ford wanted to reduce vehicle costs. Dick asked them what percentages were for materials. Steel was less than 2 %. Ford wanted to ‘beat down’ their steel suppliers. so on a 20,000 car 2% is 400 bucks. Hmmmm….China and India’s ‘steel’ is their labor. so why bother. Thx for link to my column. Appreciated… be safe